Washington has proposed a "Do Not Track" mechanism that would give Internet users better control of their personal information. The measure has Internet firms facing off with privacy groups over how tough the rules should be.
The Obama administration is considering the creation of an agency that would set standards for Internet governance, and the "Do Not Track" option has been proposed with a deadline in order to push privacy advocates and corporations to the negotiating table.
The idea for such a mechanism has been floating around Washington since 2007.
Companies like Google and Facebook, where the collection of user data makes up a massive part of day-to-day business, are worried that legislation brought on by the proposal could result in significant profit losses. Targeted advertising would be severely limited, though data collection for other purposes would be able to continue.
To groups advocating for Internet users' privacy rights, the initiative is a big step in the right direction. Cutbacks on how corporations can use information harvested from individuals would mean consumers could spend as much time online – and on as many websites – as they want, without a corporate Big Brother taking notes on how to best make money off them.
Nearly a year on, stalemate continuesBut after 10 months of negotiations, there's no agreement in sight. Indeed, advocates and corporations have not even come to an agreement on what "Do Not Track" would mean.
And if they haven't reached a consensus by the end of the year, they could face the threat of legislation to enforce online privacy, putting Internet companies in a crisis over what to do next, as their business models require that users give up personal information.
"We want to reduce the profile, the data footprint of citizens who increasingly spend a lot of time online," Jeffrey Chester, the executive director of the Center for Digital Democracy, told Reuters.
Industry at risk?Web companies say data collected for targeted advertising is what currently keeps the Internet afloat. Initially an additional source of cash for online companies, collecting user data and selling it to advertisers has become the Internet's primary source of revenue. In exchange, industry insiders say, consumers get to access online content and services for free.
"If you get rid of that, you kill the Internet. It's just that simple," said Linda Woolley, the executive vice president of government affairs at the Direct Marketing Association, as cited by Reuters.
Online advertising revenue in the US alone reached nearly $15 billion in the first half of 2011.
"If you have a business model that relies on spying on your customers, as people begin to understand that, there will be tremendous push back," said John Simpson, privacy project director at Consumer Watchdog, a nonprofit organization.
Heavyweight Internet corporations claim the White House should ensure that the "Do Not Track" tool only allows Web users to control the type of advertising they receive, not to remove themselves from the system entirely.
Competing optionsThe industry's top "Do Not Track" proposal – put together by representatives from Google, Yahoo! and their consultants – would keep companies from using consumers' personal information for targeted advertising across multiple websites, if they activated the option.
However, there would be no limit on the continued collection of user data.
According to privacy advocates, that proposal is for all intents and purposes the same as the restrictions companies already face. And with the rules currently in place, Internet companies are known for misusing users' data, for example by placing codes inside a browser in order to trick anti-tracking software into allowing data to be taken.
Another example came last month, when the story broke that travel site Orbitz had used a collection tool allowing it to determine whether a visitor was on a Mac or a PC. Having seen a study showing Mac users to be on average wealthier than PC users, Orbitz targeted them with more expensive hotel rooms.
Meanwhile, privacy advocates led by the Electronic Frontier Foundation, Mozilla and Stanford University student Jonathan Mayer propose barring third parties, like companies with ads displayed on a page, from collecting information about a consumer if they choose the "Do Not Track" option. That proposal would have minor security-related exceptions.
And the advocates say their idea would not restrict companies that create direct relationships with their users – meaning the user logs in to access the site's service, for example Yelp or Foursquare – from collecting personal information that would be used to give recommendations to the user later on.
Countdown to legislationBut the clock is ticking, and if the industry and the advocates are unable to reach a resolution soon, privacy groups will push for new laws to be put on the books, Chester told Reuters.
"If we can't get a reasonable agreement very soon, consumer groups are going to go to the [Federal Trade Commission] and the European Union and Congress and say Do Not Track is dead on arrival and we need legislation and regulation," he said.